In the aerospace and defense industry, there aren't too many major players, but they're all big and getting bigger.
As in telecommunications, mergers have shaped the landscape of the aerospace and defense industry. Boeing became the world's largest aerospace company following its 1997 acquisition of McDonnell Douglas, formerly the world's largest military aircraft maker, and its 1996 acquisition of the defense and space units of Rockwell International.
Lockheed Martin was formed from the merger of Lockheed and Martin Marietta, and it recently acquired the space systems division of General Dynamics, GE Aerospace and the Loral Corporation.
Raytheon doubled in size by acquiring the defense businesses of Texas Instruments and General Motors' Hughes Electronics.
In July of 1998, Lockheed Martin and Northrop Grumman were on the verge of another merger, which would have made the combined company the largest in the world. But the U.S. government opposed the merger on anti-trust grounds. "The government's policy has had a chilling effect on mergers in the industry," says Norman Augustine, former CEO of Lockheed Martin.
The government's policies in support of basic research, defense and the space program also have had an effect on the industry. The most significant global events to affect the defense industry were the fall of the Berlin Wall and of the Soviet Union. Augustine remarks: "We lost about 50% of our market when the Berlin Wall fell in 1989."
More recent events have had an impact as well, such as the Asian economic turmoil which has affected Northrop Grumman's ability to procure equipment manufactured in that region. The emergence of a unified European community could also work against the U.S. aerospace industry if the Europeans adopt a "Fortress Europe" policy and conduct business only among regional aerospace industries.
ON THE HOME FRONT
In the United States, research and development of new technologies play an important part in the aerospace industry. Materials research and information systems are increasingly important, as are work on sensors and propulsions and all aspects of electronics, especially micro-miniaturization.
Boeing's Defense and Space Group is developing the F-22 fighter (with Lockheed Martin), the V-22 Osprey tilt-rotor aircraft (with Bell Helicopter Textron) and the RAH-66 Comanche helicopter (with Sikorsky). The company is also collaborating on a $9 billion network of satellites for communications firm Teledesic, of which Boeing owns 10%.
The trend for companies in this sector to work collaboratively is atypical, as intense competition among the big aerospace companies is legendary and has been partly responsible for recent downsizing. There have been thousands of layoffs at Lockheed Martin, and in August 1998, Northrop Grumman announced the reduction of more than 10,000 positions by the end of 2000. Nonetheless, Northrop Grumman expects an increase of approximately 2,500 employees in its information technology and electronics business areas by the end of next year.
According to Augustine, Lockheed Martin hired more than 2,000 recent engineering graduates in 1997, and the industry in general will continue to hire in all technical fields, especially systems engineers, electronics engineers, software engineers and computer scientists. Lockheed Martin also has a need for aerospace engineers, mechanical engineers, industrial engineers, mathe-maticians and physicists.
Boeing has shown an interest in entry-level mechanical, aerospace and design engineers. The Boeing home page (www.boeing.com) lists the attributes the company seeks in an engineer, including knowledge of mathematics, physical and life sciences and information technologynot just computer literacy.
Augustine also notes that the industry is in hot pursuit of graduates who possess an understanding of the context in which engineering is practiced, including economics, business practices, history and the environment. And don't underestimate the value of good communication and presentation skills. "Without the ability to make a presentation and to deal with non-engineering society," says Augustine, "the profession suffers."
Boeing, based in Seattle and employing more than 234,000 people worldwide, is the world's largest aircraft manufacturer (both commercial and military) and the nation's largest NASA contractor. The company's Boeing 737 is the best-selling jetliner in aviation history, and its planes have a distinguished combat record. The Boeing B-17 (Flying Fortress), a long-range heavy bomber, was the backbone of the U.S. Eighth Air Force and fought in every theater of World War II; the McDonnell Douglas F-4 (Phantom) was a noted fighter plane during Vietnam War. More recently, Boeing built the Space Shuttle orbiters and main engines. It leads the U.S. industry team for the International Space Station, which is the largest international science and technology venture in history, with 16 nations working cooperatively toward its success.
Lockheed Martin, in Bethesda, Md., is the world's second largest aerospace and defense firm. The U.S. government accounts for about 66% of Lockheed Martin's sales; foreign governments and commercial operations each account for about 17% of sales. It produces the Lockheed F-117 (Nighthawk), which is almost invisible to radar and played an important role in the Gulf War of 1991, as well as the Lockheed SR-71 (Blackbird), the world's fastest jet. It also manufactures the Trident II submarine-launched ballistic missile and the F-16 fighter, and produces the spacecraft for Motorola's new IRIDIUM satellite communication network.
Raytheon, headquartered in Lexington, Mass., follows Boeing and Lockheed Martin as the third largest aerospace and defense company. It has three main segments: electronics, aircraft and engineering and construction (focusing on industrial projects). Its largest segment is electronics, where its products include environmental monitoring systems, air traffic control systems, Tomahawk and Patriot missiles and other defense systems, global broadcast systems and marine electronics. The company is a major U.S. manufacturer of small passenger aircraft (Hawker, Beech and King Air).
Other companies include Northrop Grumman in Los Angeles, which runs a close fourth in the aerospace industry with a work force of 54,000; the Sundstrand Corp., a Rockford, Ill.-based international designer and manufacturer of a variety of proprietary, technology-based components and subsystems for aerospace (57% of 1997 sales) and industrial (43% of 1997 sales) markets; and TRW, which manages its space systems, automotive products, systems integration and credit-reporting operations from Cleveland.